Will 2012 be better or worse than 2011?

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Over the holidays there were the typical discussions about New Year’s resolutions. What are you going to give up? What are you going to start doing? What are you going to do differently? This is always enjoyable conversation as there is always a ton of material to poke fun at. As everyone vows to eat less and move more, my first prediction for 2012 is that McDonald’s stock will drop as fast as Good Life Fitness memberships will increase. Let’s check back in three months to see if that comes true. We had many laughs over some wildly outrageous and absurd resolutions and predictions. However one person then threw out a question that seemed to take the conversation in a more serious tone, “Will 2012 be better or worse that 2011?” The pessimist said worse. This answer feels like a self fulfilling prophecy. Let’s eat more and move less since it doesn’t matter anyway, at least our prediction will be right. The optimist said better. One more binge of turkey and eggnog and then we’ll eat less, move more, and with a hope and a prayer the world will be a better place. From a supply chain perspective the optimist may have some incremental improvement strategies in place, especially after the disruptions of 2011, but deep down there is still an element of hope and prayer with the optimistic view (with all due respect to hope and prayer, they are good things!). Taking a supply chain view, let’s look at the realist’s answer. The realist will agree with the optimist but with a few additional actions to ensure their prediction will come true. First, the realist will study the events of 2011. In a blog post from November 2011, Trends I am Watching, Lora Cecere calls out significant trends of 2011. For example, Lora highlighted the supply chain disruptions of 2011, the biggest of these being the results of natural disasters. There are two takeaways for supply chain leaders: The first is redesigning the supply chain to be “resilient” to change. According to Lora this requires the ability to sense change, have control tower analytics, and “what-if” analysis to understand and respond to change. The second takeaway it to think about where else the disruptions will come from. The supply chain has never been more politically, environmentally, and obviously economically intertwined. As an example, Occupy Wall Street protesters were planning to block ports along the West coast. For Swiss watch manufacturers, many of their components are supplied by Swatch, “a competitive supplier.” When Swatch was looking at a strategy to stop providing their components to ensure they could supply their own product in growing markets such as China, the other manufacturers where looking for help in a nationally regulated industry where mechanical parts must be manufactured in Switzerland in order for their watches to claim "Swiss movement." One thing is for sure, there will be supply chain disruptions, but the causes may be different. The realist will reflect back on 2011, including the ones Lora highlights to understand how best to prepare for 2012. There is a great SupplyChainBrain Interview with Joe McBeth, vice president of supply chain for Jabil, from our Kinexions conference that speaks to this issue (free registration to view, but well worth it!) Lora also highlights significant trends to watch for in 2012 in the same blog post. The other action the realist will take is to reach out to gather this type of information from the folks who watch supply chains for a living. It will help take the guess work out of preparing for 2012 and beyond. For example, Lora talks about “big data supply chains.”  New data sources and types of data are exploding, global partners are expanding and new product introductions come and go faster than our New Year’s resolutions. Supply Chain leaders need to stay on top of the curve when it comes to managing the “big data supply chain.”  As with the trends of 2011, the 2012 supply chain predictions will drive strategies to ensure 2012 is better than 2011. Lora’s other predictions for 2012 are well worth checking out. So will 2012 be better or worse than 2011? I would be interested to hear your thoughts and any other resolutions! In the meantime let’s all eat less, move more, reflect on the past and keep our eyes and ears open to make 2012 an exciting time for supply chain. And for all you optimists out there, we’ll throw hope and prayer into the mix too! Happy New Year.

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